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Truth about Brazil soybean meal prices beats fictitious importer spin

(Monday, Nov. 3, 2003 -- CropChoice news) -- From a news release:

Contact: Harvey Joe Sanner (501) 516-7000, HJSanner@aol.com

Des Arc, Ark.-- The Soybean Producers of America (SPA) calls into question recent actions by Wilmington Bulk LLC, a large agribusiness consortium in Wilmington, N.C. Wilmington Bulk LLC repeated a strategy it has utilized before, announcing that it intended to import soybeans, soybean products, corn or feed wheat from abroad. According to Harvey Joe Sanner, Executive Director, a lifelong soybean farmer from Des Arc, Arkansas, "SPA has two urgent concerns with this strategy that warrant an investigation, perhaps by appropriate government agencies. First, it appears to be a blatant attempt to negatively pressure market prices paid to farmers in North Carolina and elsewhere. Why would a large corporation make a public announcement of its internal business strategies? We have noticed that in all the months that they do not import feed grains, no public announcement is made. If it smells like market manipulation and walks like market manipulation, it is probably market manipulation. It hurts farm families worldwide, and if it is not unlawful it should be."

Secondly, the farm community is aware of crop contamination in South America by the dreaded Asian Rust Virus that drastically reduces yield. Experts have warned of the danger of Asian Rust making its way to U.S. soybean fields. The United States Department of Agriculture has received appeals from SPA and other farm groups to restrict soybean imports from affected countries.

Sanner says, "Frankly, we don't believe the claims by Wilmington Bulk LLC about paying less for imported products. Their actions indicate a complete disregard for the well being of farm communities across America. By undermining the first global grain market rally in years, while many U.S. and foreign farmers are suffering from reduced drought-driven yields, and ignoring the danger of bringing Asian Rust to the U.S., it is time they explain their very suspicious actions."

Dan McGuire, SPA Chairman has documented and compared soybean meal prices from Brazil versus meal purchased from processors right in North Carolina. McGuire reports, "On October 28, 2003, 48-percent soybean meal pellets FOB the port of Paranaqua, Brazil were priced at $258 U.S. per metric ton (MT). When ocean freight to Wilmington, N.C., plus discharge, handling and inland freight to feeding operations is added, the price was about $308/MT. On the same day 48-percent U.S. soybean meal was priced at $306.03/MT from Raleigh and Fayetteville processors. Also, if importers buy a shipload (35,000 MT), they have to pay interest on the money used until all that meal is sold out. If they buy railcar or truck quantities in North Carolina, as needed, they avoid that added interest cost. 'Strategic' talk from importers of competitively bringing in feed wheat or corn from Europe is bogus nonsense! No. 2 yellow corn and No. 2 Soft Red Winter wheat in North Carolina were from $1.50-$2.00 per bushel cheaper than European or UK corn or feed wheat, based on October 28, 2003 prices, even before adding ocean freight from Europe, plus discharge, handling and inland freight to feeding destinations. As usual, the agribusiness strategy appears to be about driving U.S. prices down.

This same strategy has been shown to also drive down world prices, as the U.S. is the proven price leader in the world for these commodities. This fact was once again proven in the recently released study, Rethinking U.S. Agriculture Policy: Changing Course to Secure Farmer Livelihoods Worldwide, by the Agriculture Policy Analysis Center (APAC), part of the University of Tennessee.

This strategy must be stopped! Brazilian soybean meal, EU or UK corn or wheat prices, plus ocean freight costs expose the misinformation that imported feed is cheaper. This case study confirms the dangers of current U.S. trade and farm policy and the exploitive mentality of the agribusiness multinationals who conceived it," concludes McGuire.